Rise of super high-end luxury property create head room for mid-end luxury market

Mid-end luxury markets are properties that are usually located in the outer central region

. They are normally located outside the boundary of the District 9, 10, or 11. The present market value of the mid-end luxury market properties ranges from $1,100 to $1,500 psf. However, it would be difficult for this market category to go beyond the price level of $1,600 with the ceiling prices that Leonie Studio and Shenton are offering. Leonie Studio ceiling price ranges from $1,700 to $1,800 while the Shenton ceiling price ranges from $1,800 to $2,000. Considering the ceiling prices disparity and the property classification, the mid-end luxury market could not achieve a price that goes beyond the $1,600. Average price level could be close to $1,300 and $1,400 levels for the mid-end luxury market. The mass market condominiums are selling at an average price range of $1,000 to $1,100 psf for over 99 years with properties located at the non-traditional prime areas.

Holding power of buyers

The unemployment rate in Singapore is about 2.2% in March 2010 (source: Ministry of Manpower). The physical shortage of the HDB supply is not immediately balance when the government is issuing land. The country is still experiencing shortage of HDB supply. The sudden downward spiraling of prices may not affect much the property buyers as long as property buyers offer reasonable prices and do not over bid. The best strategy is for the property buyers to bid within the median of the property prices in Singapore to be strongly competitive. Although this may not be applicable to highly priced developments or projects that demonstrate larger swings, this is good enough to keep up with the competition in cases of low HDB supply.

HIGH END MARKET versus Mass Market

The high-end market could still sustain a low HDB supply situation with the potential to appreciate its value including the properties located near the location of the high-end market. They would escalate too whenever the high-end properties near their location raise their market value. Properties with attributes comparable to the best locations across the globe will have a price benchmark equivalent or comparable to the internationally known best properties in other known locations. Exclusive attributes such as the Yacht Berthing, sea view, special butler service, near to exclusive resorts, within town and financial centers, centers of entertainment or other activities could help increase the worth of the property.

Rise of super high-end luxury property create head room for mid-end luxury market

By: Shirley Tan

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